Chinese telecom firms urge FCC not to block U.S. operations

WASHINGTON (Reuters) – Pacific Networks Corp and its wholly owned subsidiary ComNet (USA) LLC on Monday urged the Federal Communications Commission (FCC) not to shut down its U.S. operations.

In April, the FCC issued show cause orders to three state-controlled Chinese telecommunications companies, including Pacific, citing national security risks.

The FCC directed China Telecom Americas, China Unicom Americas and Pacific Networks to explain why it should not start revoking authorizations enabling their U.S. operations.

The other two firms have not yet filed formal FCC responses.

Pacific and ComNet said in a 92-page FCC filing that “neither company has been asked by the Chinese government or the Chinese Communist Party to take any action that would ‘jeopardize the national security and law enforcement interests of the United States.’”

The companies said they have operated in the United States for 20 years without any FCC enforcement action.

Pacific Networks resells international voice and data to U.S. operators on a wholesale basis; ComNet provides international termination service, global SIM card service and international calling card and interexchange service, the FCC said.

The companies said they “not only operated independently from the Chinese government” but have “complied and cooperated with the United States government.”

The FCC granted approvals to the companies more than a decade ago. Since then, it said, “the national security and law enforcement risks linked to the Chinese government’s activities have grown significantly.”

Earlier, the U.S. Justice Department called on the FCC to revoke China Telecom’s ability to operate in the United States.

In May 2019, the FCC voted unanimously to deny another state-owned Chinese telecommunications company, China Mobile Ltd, the right to provide services in the United States, citing risks that the Chinese government could use the approval to conduct espionage against the U.S. government.